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With malice in Manila

Usurious practices are earning Indians a bad name in the Philippines, reports Madhur Singh.

india Updated: Dec 17, 2006 02:36 IST

Had the Indo-Asean Summit planned in the Philippines gone according to schedule, chances are Manmohan Singh wouldn’t have been the most popular Asian leader in the host country.

It was clear how the Filipinos feel about India from a BBC World Service poll that came out earlier this year.

While most participants — 39,435 people in 33 nations across the globe — agreed that Iran was the most negative influence on the world, a majority of Filipinos opined that the distinction belonged to India. Granted that Pakistan wasn’t among the countries surveyed — in which case, it just might have outdone the Philippines — and that most of those polled weren’t particularly enamoured of India. But why, of all the people, would Filipinos hate Indians the most?

Turns out the reason is less about geopolitical or ideological affiliations than about the Filipino’s impression — more real than perceived, unfortunately — of the Indian diaspora in their country.

Of the 50,000 or so Indians in the Philippines, a sizeable number are Punjabis who work as small-time moneylenders, commonly referred to as ‘Bombay 5-6’. They do, of course, have a better name for their profession — they call it micro-finance (not of the Grameen Bank kind, though).

This is how they operate. The Philippines being a developing economy, it has a large informal sector comprising small vendors. The ‘Bombay 5-6’ people lend money to these cash-starved micro-entrepreneurs at a daily interest rate of about 20 per cent — if they lend 5 Philippine peso today, they will take 6 back tomorrow.

Needless to say, many in the Philippines see them as loan sharks that the country could well do without. But, of course, it can’t — which is why they have a market and are flourishing.

The feeling is mutual

Siddharth Bahri, who works for a leading business process outsourcing company in Delhi, had a stint in the Philippines before returning to India this year. He says, “You wouldn’t feel particularly proud of being an Indian there. I know of many Indians — mainly from small towns in Punjab with families to feed back home — who work as ‘5-6’ moneylenders there. Many of them have struck gold.”
Occasionally, they even find support from the government.

Imee Marcos, the vice-chairman of the House Committee on Foreign Affairs, in 2003 came out strongly in support of the ‘Bombay 5-6’ who, he said, have been enabling poor Filipinos to set up small businesses.

Moreover, Indians are not the only ‘5-6’ operators — there are Filipinos among them, too. The name ‘Bombay’ 5-6, in fact, is a bit of a misnomer — most of the Indian ‘micro-financiers’ are Sikhs with little or no connection to Mumbai.

The Information Office of the Philippines embassy in New Delhi says many Sikhs from India migrated to the island country after Partition and again after the 1984 riots.

They are said to have learnt money-lending skills from the Sindhis, the other large Indian community in the Philippines, who often hail from Mumbai.

The fact that a large number of ‘Bombay 5-6’ moneylenders are illegal immigrants — which entails that they use hawala networks to send money back home — makes the issue highly sensitive. So sensitive, in fact, that it regularly features in Parliament questions, and the Indian embassy in the Philippines refuses to talk about it.

The last time the question was raised in Parliament, on November 26 this year, minister for overseas Indian affairs, Vayalar Ravi, said the government was trying to discourage young people from Punjab from migrating to the Philippines as “they tended to indulge in money-lending and other activities which was affecting the image of India in that country”. The question followed a spate of crimes targeting Indians in the Philippines, particularly muggings and murders.

An official at the Information Office of the Philippines embassy, who did not wish to be named, said, “The rates these ‘5-6’ operators charge are usurious. The situation is similar to the debt-ridden farmers of India. It casts a poor light on all Indians in the Philippines.”

The official admits, however, that the Philippines is not particularly well regarded in India, either. “Educated, well-to-do Indians prefer to go where the grass is greener, like the US or Britain,” she says.

With efforts at building an Asian community on full throttle, it’s possibly time the Philippines and India brought on the PR professionals.

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First Published: Dec 17, 2006 02:36 IST